South Dakota state government finances among the best in the nation
By: Press Release, Office of the Governor
PIERRE, S.D. – Gov. Mike Rounds says one of the world’s most respected and widely used sources for credit ratings, financial research and risk analysis has just released a report that says South Dakota state government finances are among the best of any state.
“While there’s a lot of political rhetoric at the moment about the state budget, this outside review is proof that state government in South Dakota is in better shape than nearly any other state in the nation,” the Governor said. “Although state revenues are below that of two years ago, we have been prudent with spending and this report confirms that. The sky is not falling. South Dakotans are responding well to a challenging national recession.”
The report by Moody’s Investors Service says South Dakota has maintained “strong fund balances” despite the recessionary stress on revenues. Moody’s also says state government has a “very low debt burden” and is better positioned than other states to cope with its budget after federal stimulus funds run out next year.
The favorable analysis is included in a report that indicates Moody's has upgraded the ratings on nearly $24 million in bonds to be sold as early as next week for vocational schools in South Dakota; the firm has also upgraded another $16 million in existing South Dakota Building Authority bond obligations.
“For a state to receive an upgraded bond rating in these difficult economic times is extremely rare,” said Jack Arnold, senior vice president for Dougherty and Co., the financial advisor to the state Health and Educational Facilities Authority.
South Dakota’s bond ratings are good to begin with. The upgraded ratings reflect the financial strength of the South Dakota economy and mean that the bonds will sell at more favorable interest rates for the state.
“South Dakota in recent years has built a record of strong financial performance, and it has maintained general-fund balances better than most states during a period of extreme fiscal difficulty,” Moody’s noted.
The report notes that state expenditures increase by a modest 2.8 percent in the Fiscal 2011 budget.
“South Dakota’s debt burden has stayed low, reflecting conservative financial management as well as constitutional debt limits,” Moody’s adds. “The state’s net tax-supported debt ranks 47th, both as a percentage of personal income and on a per-capita basis.”
Gov. Rounds says the state has balanced its budget without using reserves, which are at nearly the same level as they were in 2003. Selected spending cuts were also made, and taxes were not increased, the Governor noted.
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